Friday, February 26, 2010

Basically James Inhofe can't dispute the scientific consensus on climate change with any rational argument. He rejects the consensus because of who supports it. If the U.N. supports it, it must be wrong. If the White House supports it, it must be wrong. If Hollywood figures support it, it must be wrong. His is an interesting world in which truth is not defined objectively but by who says it. If these same people reversed their positions, Inhofe would be psychologically bound to reverse his regardless of the fundamental reality.

Sunday, February 21, 2010

Recent history has shown an seemingly inexorable increase in globalization of trade. Krugman points out that changing technologies and practices have resulted in ebbs and flows in globalization over time. Are there coming changes that could reverse the current trend?

Wednesday, February 17, 2010

Martin Wolf calls to task the deficit fear-mongers out there trying to stampede people into ending economic stimulus.

"Prof Ferguson is trying to frighten US policymakers out of sustaining or, better still, increasing fiscal stimulus, even though the true issue is longer-term sustainability. He also accuses opponents of believing in a “Keynesian free lunch”. Not so. The argument is, rather, that the benefits of the higher output today exceed the costs of debt service tomorrow.Prof Ferguson believes instead in a conservative free lunch. This is the view that fiscal tightening today would have little effect on activity. Normally, when monetary policy has room for manoeuvre and the private sector’s borrowing is unconstrained, that is right. But, as Olivier Blanchard, chief economist of the International Monetary Fund, and colleagues note in a recent report: “To the extent that monetary policy, including credit and quantitative easing, had largely reached its limits, policymakers had little choice but to rely on fiscal policy.”"

We need to keep the stimulus tools at hand while keeping an eye on the future. We need to give the private sector the time it needs to heal. A key part of that healing process is to put appropriate financial regulation in place. We need to make sure that the banking shenanigans that got us into this mess are only history.

The budget deficit in FY 2009 was a whopping 9.9 percent of GDP, the highest it has been since World War II. And that enormous deficit was caused as much by a dramatic decline in tax revenues as it was by an increase in spending. In fact, the size of the revenue decline was four times larger than all of the new spending initiatives started since President Obama took office. Tax revenues in 2009 were at their lowest levels since 1950. When revenues decline by 17 percent, as they did last year, deficits skyrocket.

President Bush inherited a record budget surplus when he took office. Yet he managed to turn that surplus into a massive deficit after repeatedly cutting taxes while prosecuting two wars and enacting billions of dollars worth of new spending programs without paying for any of them. By the time President Obama took office in January 2009, the Congressional Budget Office was projecting a budget deficit of $1.2 trillion for the year. The dramatic decline from record surplus to record deficit under President Bush resulted in a nearly $3 trillion increase in publicly held debt, the largest debt expansion in American history.

In fact, the incredible budgetary decline that took place under President Bush is responsible for far more of our current deficit troubles than any new initiative taken under President Obama. More than 50 percent of 2009’s huge deficit can be directly attributed to policies enacted by the previous administration, and that is not counting the 20 percent that was due to the economic disaster that began and gathered its momentum on President Bush’s watch. President Obama’s efforts to rescue the economy, on the other hand, are responsible for only 16 percent. Much more importantly, the long-term fiscal damage done by the Bush administration absolutely dwarfs any lasting effects of the temporary economic recovery measures taken under President Obama. The Bush-era tax cuts alone will add more than $5 trillion to the budget deficit over the next 10 years.

A deficit peacock is someone is more interested in scoring political points than actually decreasing the deficit. Do they only focus only on spending cuts, with nary a word about revenues? Do they offer easy answers and simple solutions? Are they in favor of actions that would actually exacerbate the problem? Do they blame all our woes on President Obama and neglect to even mention the previous eight years? If any of the answers are “yes,” then you’ve identified a deficit peacock.

Monday, February 15, 2010

Here is the latest Republican assault on common sense. From my admittedly cursory reading the piece consumes plenty of ink whining about how bad the situation is. But when one finally finds a paragraph that suggests a solution it turns out nothing other than basic Republican ideology. On health care, for example, the solution (as near as I can discern) is to expose patients to the true and complete costs of their care and let them decide what they can afford. In other words, let the market decide who gets care and who doesn't. It seems to me that the consequence of that approach will be nothing more than what we see in our emergency rooms today only on a much larger scale. People will avoid early intervention because it is too expensive and will only seek care much later when it is really too expensive, potentially fatal, and the costs are borne by everyone anyway. A form of this solution is already not working. Why would we want to expand that approach? There's no reason to believe that the Roadmap Plan has any ideas that are more intelligent in its other points as well.

Russell Shorto has a lengthy article about the battle being waged over how religion is to be included in future American history textbooks. There's some major conservative, fundamental (so-called) Christian players who are in a position to insert their peculiar interpretation of the Founding Fathers into what children are taught across the country. Their leverage arises out of the fact that the choices made for the state of Texas influence what the publishers print for the rest of the country. The only way this sad state of affairs will change is when the rest of the states muster the intestinal fortitude to refuse to buy books containing this narrow and patently inaccurate point of view.

After all, there is no reason to accept that these biblical-literalists have the final word on either religion or history. To let them establish the standard is to give our education over to an American Taliban of religious fanatics.

But let's set the argument about the past aside. What is the appropriate place of religion in our society for the future? It's a common thought that the fundamental basis of morality is found in religion. But the fact of the matter is that the morality has been brought into religion from the outside. It's we humans who have built up moral codes in various places and times and then attributed them to God or the gods as the case may be. The moral pronouncements of God would not be the least bit appealing if they didn't resonate with our own internal sense of justice and fairness. The reason there have been and continue to be such struggles over such things as gender equality or the place of homosexuals in society is because our sense of justice is in conflict with traditional religious morality. Eventually human-centered justice will prevail because tradition by it's very nature is, over the long run, malleable.

If we are all going to be able to live together as a united society there has to be a common moral code that serves as a check on our diverse religious codes. We don't allow murder in the name of religion. The boundaries between the jurisdiction of the common code and the religious will always be under constructive tension. A patient can refuse a life-saving blood transfusion if he has a religious objection against it but is it proper to refuse the transfusion to a child who has yet to develop a particular religious viewpoint of her own? Who should be the subject of prosecution in such a case?

Regardless of what was in the mind of the founding fathers we should be asking what makes moral sense today and tomorrow? Do we want to have a society in which women are second-class citizens as they were in Old Testament times? Do we want to have a society in which our beloved children who happen to be homosexual are prohibited from experiencing society's approval and support of their long-term loving relationships? Do we want to have a society in which there are different rules for the rich and powerful than there are for the disadvantaged? These are more important questions than whatever it was Thomas Jefferson or John Adams thought.

Sunday, February 14, 2010

In Indonesia drilling can produce long range consequences. In this case a single bore hole started a mud volcano in 2006 that has displaced 30,000 people. And in still erupting with no sign of let up. The mud has now covered 3 square miles 20 feet thick. It may continue to erupt for decades.

Thursday, February 11, 2010

Ponder this. What would it mean if we could use the sunlight to create a steady stream of hydrogen? This nano-particle charge device does just that at an efficiency of 60 per cent. And that's just the prototype. How much better can that get with some additional practical experience? I wonder if this might be the true path for solar-based power. If you are producing clean-burning fuel from the sun you don't have to worry about storing energy for when the sun doesn't shine. You are storing it automatically.

Elizabeth Warren is saying the Treasury and the Fed aren't prepared for this one:

"Because commercial real estate loans typically have three- to five-year terms, those loans are constantly being refinanced. The problem is that loans made at the height of the boom -- 2005 to 2007 -- were based on inflated values during a time of easy money, and now they're coming up on the end of their terms.'There was a big commercial real estate bubble, and it has to come down,' Warren said. 'And that means there will be losses to be borne by investors and banks.'"

Sunday, February 07, 2010

When oil companies get into the renewable business is it likely to help or hurt? How do you make appropriate regulation to keep one sort of technology from buying out and suppressing a competing technology? This isn't strictly an anti-trust issue but it is something like that. How does one craft energy policy that allows unfettered flourishing of alternatives but doesn't inappropriately skew the market?

Thursday, February 04, 2010

The Obama administration has hit on what should be a winning idea for the foreseeable future. As a country we need to be about the business of positioning the country fol global competition in the 21st century. This means strengthening the economy by plowing money and effort into education, infrastructure, health care, and other strategic investments. Democrats should continue to find ways to do this. Republicans, on the other hand, just want to prevent big government at all costs.

Tuesday, February 02, 2010

Rachel followed that up with an interview with Barney Franks. Here are his zingers.

In a Republican strategy memo the idea is to link any legislation they don't like to the bank bailout, such as the Consumer Financial Protection Agency. You know, that outfit chartered to protect consumers from credit card abuses, overdraft abuses, payday lending abuses, and so forth.

The bailout of AIG, the TARP for banks, the automobile company bailouts was all done under George Bush.

The agencies that are exempted from the protection agency oversight were exempted by Republican votes.

When it came down to voting on financial reforms, there was no additional regulations that got a Republican vote. Not any regulations on derivitives. No restrictions on risky loan practices.

The original AIG bailout allowed the Bush adminstration to give out the money anyway they wanted to. That has since changed.

When the final financial reform bill came to a vote, the minority party has an opportunity to offer whatever amendments they wanted. The only amendment the Republicans offered was "strike all after the enacting clause". Essentially that means kill the whole bill. They wanted no reform whatsoever leaving us with the system that caused the meltdown in the first place.

In 2007 and in the current bill, the House passed a bill to restrict bad loans, to forbid loans to people who couldn't pay for them. Republicans voted against it both times. They say that liberals wanted people to buy houses they couldn't afford but the Republicans had a chance to stop it from happening and they voted against it.

One of the things that led to the housing meltdown is that the people who lent the money were able to sell those loans. Essentially they were able to pass the risk of the lending off to some other poor shmuck of a banker. So they had no incentive to make sure the loans were good. The system made it easy to for the originators to make lots of money off bad loans at no risk. Financial reform would close the door on that.

[So whenever you hear a Republican expressing righteous anger about bank bailouts and bad financial practices, remind him or her that it was Republicans who voted against policies that could have prevented the meltdown, it was Republicans who asked for the bailouts, and it's Republicans who continue to vote against reforms to prevent a repeat of the meltdown.]

It seems that all it takes to make Republicans change their position is for Obama to come out in support of it. Yesterday Rachel Maddow gave a nice list.

- Bipartisan Fiscal Commission: orginally supported by Sam Brownback, Mike Crapo, John Ensign, Kay Bailey Hutchison, James Inhofe, and John McCain. All voted against it after Obama supported it.- Pay-as-you-go: John McCain, George Voinovich, Susan Collins and Olympia Snowe supported it until Obama, then no.- Cap-and-trade: John McCain and Lindsey Graham, yes then no.- trying terrorism suspects in federal courts: under Bush yes, under Obama no.- cutting taxes for 95% of working families and small businesses: same story.

It appears that the political thwarting of Obama is more important to Republicans than policy. They are more concerned about who wins than governing well. Many of us had that figured out years ago. Then it was an inference from the way campaigns were run. Now it's right out there in the open. Voters will get what they deserve if they continue to allow themselves to be bamboozled by this behavior. And Democrats will likewise get what they deserve if they don't raise the alarm.

Evidently there's a meme going around that in the rollback of the Bush tax cuts taxes are going to go up across the board at all income levels. This Bloomberg report says otherwise.

"The administration budget released yesterday would reinstate 10-year-old income tax rates of 36 percent and 39.6 percent for single Americans earning more than $200,000 and joint filers making more than $250,000 as part of a broad $1.9 trillion tax increase proposal. It proposes to eliminate preferences for oil and gas companies, life-insurance products, executives of investment partnerships and U.S.-based companies that operate overseas."

So not only are the Bush cuts remaining in place for middle and lower income folks, new cuts for them are in the budget.

Obama proposed $143.4 billion in new tax cuts for individuals who earn under $200,000. While the budget sets out $93.5 billion in gross tax reductions for businesses, overall they would face a net tax increase.

“The proposed budget’s $300 billion in tax relief over the next 10 years for individuals, families, and businesses is mostly targeted and limited, often to people who don’t have to pay any taxes,” said Senator Charles Grassley of Iowa, the ranking Republican on the tax-writing Senate Finance Committee. “The tax increases in the budget dwarf the tax relief.”

It's difficult to have a serious discussion about the budget when folks are reporting things that simply aren't true.

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The mind is not a vessel to be filled but a fire to be kindled.--Plutarch

I never meant to say that the Conservatives are generally stupid. I meant to say that stupid people are generally Conservative. I believe that is so obviously and universally admitted a principle that I hardly think any gentleman will deny it.-- John Stuart Mill

We should do everything we can to make sure this country lives up to our children's expectations.--Barack Obama

cogito ergo sum. -- Descartes

Concerning prayer-I would imagine somebody in back was taking care of that for me while I was flying the airplane.--Captain Chesley Sullenberger

Countless lives were saved when I decided not to become a nurse. --Mildred Walton

The secret to a long marriage is to take care of your health.--Mildred Walton